European stocks weaken on U.S. budget concern

LONDON Fri Nov 16, 2012 10:25am EST

LONDON Nov 16 (Reuters) - European shares extended losses on Friday, led by the banking sector, in tandem with weakness on Wall Street as a result of persistent concern about the U.S. fiscal policy outlook.

The FTSEurofirst 300 was down 0.8 percent at 1,069.94 by 1515 GMT, within a whisker of the day's low, while the Dow Jones industrial average traded down 0.3 percent.

The STOXX Europe 600 Banking index, meanwhile, was down 1.4 percent.

Investors worried about the potential impact of the U.S. "fiscal cliff" of spending cuts and tax hikes due to kick in early 2013, as President Barack Obama and congressional leaders prepared for budget and tax talks on Friday.

"As soon as America opened... the sellers have been coming in," Will Hedden, trader at IG in London, said.

"We've hardly been talking to anyone about what's going on in Europe - everyone's worried about America, and I think it's going to continue."

(Reporting by Tricia Wright; editing by Simon Jessop)

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